BTC Traders on Derive.xyz Brace for 20% Downside with Put Options

Traders on the decentralized exchange (DEX) platform Derive.xyz are positioning themselves for potential downside volatility in Bitcoin (BTC), according to data shared by the onchain options platform. This trend contrasts with the activity observed on the centralized options platform Deribit, where traders have been more bullish.

As of Monday, 20% of the total BTC options open interest on Derive.xyz, valued at over $54 million, was concentrated in put options with strikes at $85,000, $100,000, and $106,000, all expiring on July 11. This indicates a defensive stance among BTC traders on the platform, with put options accounting for over 70% of the trading volume in the past 24 hours. A put option gives the holder the right to sell the underlying asset at a predetermined price, suggesting that traders are bracing for potential downside movements in BTC's price.

Nick Forster, founder of Derive, suggested that this positioning could be a response to macro uncertainty or profit-taking after recent strength in BTC's price. The bearish sentiment on Derive.xyz contrasts with the activity on Deribit, where traders have been abandoning July expiry put options and buying back upside bets or call options. This shift on Deribit coincided with a 7% increase in BTC's price last week, which marked a strong rebound from levels below $100,000.

Deribit noted that the dumping of put options with strikes below $100,000 and the buyback of call options with strikes between $108,000 and $115,000 indicated a calmer environment and the upcoming July 4th U.S. long weekend. This activity suggests that traders on Deribit are more optimistic about BTC's price prospects in the near term.

In contrast to the bearish sentiment on Derive.xyz for BTC, traders on the platform have taken a bullish stance on ether (ETH). About 30% of the open interest in ETH options is concentrated in call options with a strike price of $2,900, and another 10% is in call options with a strike price of $3,200. This positioning is likely driven by anticipation of the ETHCC event in Cannes, a major gathering historically associated with product announcements and ecosystem growth. Traders appear to be expecting catalysts that could drive upward momentum in ETH's price.